Anyone starting a medical billing business often looks for a sample contract online to use as they market their first clients. They really don’t know where to start and feel that a sample will help them figure it out. The problem with this is that there are so many things to consider when writing a contract that they can’t all be covered by looking at sample contracts.
Our first contract was one page that basically said that we would complete the work within a reasonable time frame and how much we would get paid. We felt that if a relationship with a provider wasn’t working out we didn’t want to be working for them anyway. As we grew and gained experience, we saw the need for much more to be included in our contract and we understood why it was important to be very clear with the terms of the contract.
Why do you even need a contract? Can you just start doing the billing for a provider without a contract? That would be very unwise. Contracts spell out exactly what is expected of each party and what the consequences are if these expectations are not met.
What are some of the things that need to be included in the contract? It needs to be very clear as to what services the biller is providing. Are you offering full services? What is included in that? Are you simply submitting the claims or are you tracking them and resubmitting problem claims and filing appeals when necessary? Do you charge a set up fee? Will you be helping the provider with their credentialing needs, coding, patient billing, working aging reports and negotiating contracts? These are just examples of a few of the services that need to be considered.
What are you charging the provider for your services? How is the provider going to pay you? Are they paying you a flat fee, a per claim fee, or a percentage. If you are charging a percentage, what is the percentage based on and is it legal to charge a percentage in your state. When is the payment due and what are the consequences if not paid on time?
What is the length of time a contract is in effect? What happens when that time frame expires? Can the contract be broken prior to the the length of time designated in the contract? What reasons would constitute the breaking of the contract?
Confidentiality must be covered. Patient information must be kept confidential as required by HIPAA and this should be covered in the contract.
This list does not cover all the things that must be covered in a contract but I hope it gives you an idea of how important it is to really spend some time developing a good contract that will hold up in court if necessary. Unfortunately this sometimes happens even in the most well intended relationships and it is best to have it all fully explained. If you need more help with your contract, we recommend our ebook “How to Write a Kick Butt Contract for Your Medical Billing Business”